Sharply higher petrochemical prices push January IPEX up 9.4%

Nigel Davis

07-Feb-2017

LONDON (ICIS)–Sharply rising petrochemical and polymer prices, largely on the back of tight availability, are reflected in a 9.4% increase in the ICIS Petrochemical Index for January, data showed on Tuesday.

Regional prices for January were markedly higher for methanol, butadiene, propylene, polypropylene and benzene.

The Global IPEX, at 265.35, is 33.5% higher than in January 2016 and represents the highest IPEX reading since November 2014.

Price increases running into 2017 were most apparent in the spot price driven markets in northeast Asia but the pull of product into Asia has helped raise prices in other regions over the past four weeks.

The northeast Asia IPEX for January was up 10.1% month to month having risen by 9.2% in December. The January IPEX for northwest Europe was up 8.7% and that for the US Gulf up 8.5%.

IPEX January 2017

Some petrochemical and polymer prices have risen markedly over the past month but the increases in January were focused on olefins and intermediates and not necessarily on polymers. The dynamic of higher prices reverberating around the world was apparent with higher month to month price increases in northwest Europe and the US Gulf rather than in northeast Asia.

The increase in butadiene prices globally is noteworthy, driven by stronger automotive tyre demand in China and a tightness of supply in Asia that has been felt worldwide. Weather-related natural rubber production cuts have pushed natural rubber prices higher and affected synthetic rubber market sentiment.

Butadiene prices in northeast Asia were up 43.3% in January and prices were 29.8% higher in the US and 18.9% higher in northwest Europe.

A supply crunch helped lift northwest Europe methanol prices by 44.8%, according to the IPEX data. Demand has been sustained by markedly higher methanol imports into China.

US Gulf propylene prices for January climbed by 31.7% and helped to push US polypropylene prices up 19.4%.

Benzene prices were up 29.2% in northwest Europe, up 15.6% on the US Gulf and 11.9% in northeast Asia.

Toluene prices were much higher globally.

The IPEX represents price movements in a basket of 12 petrochemicals and plastics weighted by capacity. It is calculated each month on a regional as well as a global basis as monthly contracts and local spot prices move.

The 12 petrochemicals in the IPEX basket are ethylene, propylene, butadiene, benzene, toluene, paraxylene, styrene, polystyrene (PS), polyethylene (PE), polypropylene (PP), methanol and polyvinyl chloride (PVC).

Download global and regional ICIS IPEX data here

View the full IPEX methodology here

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